Cheaper ads, better ROI and AI at the heart of everything, but the metaverse still the ‘long-term play’ for Meta
It’s been what some would consider a year to forget for Meta, as the harsh reality of its metaverse investment bit, with two rounds of job cuts capping things out. Yet things are on the up, with audience numbers and engagement figures across its platforms giving the tech giant’s Naomi Shepherd and Carolyn Bollaci a spring in their step.
Shepherd, director in Meta’s Global Business Group said in the realm of the platform’s performance for advertisers, things are “super healthy”.
Bollaci [left] and Shepherd [right] on this week’s Mumbrellacast
With a name change for the parent company to Meta in H2 2021, the company shifted its attention to the next big thing: the metaverse. After everything that has come since, it is now tempering that focus, with the bulk of its investment now shifting to AI.
But the metaverse still remains part of the plan. Changing the name was about signalling “we’re about more than just the blue app,” Shepherd said, “giving us a clear position in terms of where we’re going as a company over the next three, five, 10 years”.
Shepherd said the company will continue to invest in the metaverse, while the company’s local agency director, Bollaci said the name change was a clear “long-term play”.
“We changed our name, we really came out strong with what this was going to be in the future and what it could promise. But we were pretty open with the fact that it’s a very long-term play in terms of it’s not here today or it’s not here tomorrow.
“What we have been doing is building out this metaverse readiness model, especially with the agencies, and making sure that not only do they understand what they need to do now to set their business up for tomorrow, but also what kind of people they might need to hire, what kind of skillsets they need to have within the agency and really start to think about the outcomes that they want to have in that more metaverse, AI, type future that we might be in, and then work backwards from that.
“It’s probably important to look at everything that we’ve done as Meta in the last year,” added Shepherd. “Clearly there’s strength in the platforms like Facebook and Instagram, which have been around for many years, and Messenger and WhatsApp, but at the end of last year, we shipped Meta Quest Pro, which is a mixed reality headset. We’re seeing more exploration in virtual reality and augmented reality than we’ve probably ever seen before.
There are more than 200 apps on Meta’s VR devices that have made more than a million dollars in revenue, according to the company.
Shepherd said that while the focus is now on the investment in AI, it’s not a new area for Meta. AI is powering a lot of its new brand suitability controls that it rolled out to market last week, and is “kind of at the centre of everything we’re doing.”
“Fundamentally, AI is helping us do two things as it relates to advertising,” Bollaci said later in the conversation. “Improve ad relevance and automate the experience for advertisers, so we want to make sure that we’re driving better results and saving time, and then also helping advertisers learn more about what works, so they can make better decisions with their ad budgets.
“So really just again, trying to help create growth that lasts. Every dollar spent is a dollar well spent and getting better. That’s the beauty of AI, it gets better the more it learns, and in Australia, we’re seeing a huge uptake of our AI suite of products.”
Better? And cheaper
Bollaci said its customers are finding its performance from a cost-per-ad perspective decrease, while the return is increasing.
Meta has reported that the price of an ad within its platforms has dropped by 16% year-on-year, down 22% in Q4 2022 alone. On the flip side, the cost of media overall continues to inflate, with TV media increasing by 35% in 2022, according to WARC figures.
“This is in conjunction with our audience engagement continuing to grow, so a lot of perfect storm factors are coming into making sure that we’re driving as much efficiency within the media that is being bought through our family of apps for our advertisers.”
It’s a top priority for our business, and it’s a top priority for agencies on behalf of their clients during a time when we need to really push as much efficiency through the media channels as we can.”
“There’s a perception in market, or there has been in the past, that digital marketing, Meta and Google included, were also party to driving this inflation, so we really dug deep and we wanted to get under the hood of it because we didn’t believe it was happening and we could see all the advancements that we were making from a product perspective.”
Bollaci said it is seeing efficiencies rise across CPM and ROI is up too. All of this is coming at a time when the pair said engagement on it\s family of apps, which includes Facebook, Meta, Whatsapp and Instagram is up eight percent year-on-year, with 18 million on Facebook and 15 million active every day in Australia.
“All these really amazing factors are coming into play that’s showing that we are hoping to provide growth that lasts to agencies and be the best dollar that they spend.”
Listen to the full conversation with Shepherd and Bollaci below on this week’s Mumbrellacast from the 17:12 mark.
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Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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